DXY Under Pressure as US Shutdown Nears Resolution

Dollar is trading lower as expected, while stocks remain in a very nice uptrend — and most likely this trend will continue, especially now that the US government shutdown is coming to an end after the House approved the bill. We still need the final confirmation and signature by Trump, but overall markets are optimistic, and that’s why stocks pushed higher in the last few days.
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Of course, we could still see some retracement on equities if “buy the rumor, sell the news” effects fade a bit, since much of the recent upside came from speculation that the government would reopen. But even if we get a pullback, I would still expect more upside on stocks later on. This risk-on environment is something that will likely keep the dollar weak, and we can already see price on DXY trying to break the trendline support connected from October swing lows. Ideally, we are waiting on a final overlap with 99.15 — once that happens, doors should open for a move toward 97.70.